By Gregory Hale
In these days of resource challenges, productivity will be the answer on how to get manufacturers to the next level of strong profitability.
That is one of the most important topics in the business world today,” said Raj Batra, president of Siemens Industry Automation Division during his keynote address today at the 2012 Siemens Automation Summit in Washington, DC.
Contrary to public opinion, manufacturing in the United States grew last year by 4.3 percent and should grow by 5.2 percent this year, Batra said. While that not is a huge number, it is a positive sign the economy is coming out of its deep slump and is moving forward.
One of the reasons for the growth is a concept called reshoring, where manufacturers are not farming out manufacturing to a less costly manufacturing center, but rather bringing manufacturing closer to where they will sell the product.
A few of the reasons for this are the energy costs involved in shipping the product across the globe and also the rise in wages in the manufacturing countries. Batra said.
Also because manufacturing is more strategic to enterprises, that means companies are now spending more on innovation. “Manufacturing represents 11% of U.S. GDP but accounts for 70 percent of R&D,” Batra said citing industry research.
Yet another issue confronting manufacturers is the hunt for resources. Finding oil, water, natural gas, and minerals is not as easy as it used to be, so it costs more to cull them from the earth.
“We are feeling the resource crunch,” Batra said. “There has been a 100 percent increase to bring oil wells online in the past decade. The next 20 years are going to be different.”
What is the answer? Batra said productivity.
If a company can increase its productivity, they can reap more in profitability. Areas to do that include increasing energy efficiency, increase the efficiency in municipal water operations, and increase the use of renewable energy.
Increasing productivity is something the industry has talked about for years, and it is really moving in that direction, but that is just one aspect a manufacturer can look at for future growth.
Another area for a manufacturer to understand is what the plant will look like in years to come. That is where Yiannis Dimitratos comes in.
The head of the Corporate Center of Competency in Automation & Process Control in Engineering and Operations for DuPont said during his keynote manufacturing plants will look quite a bit different in the coming years than they have in the past.
He said it is all about process operability. “That is the key to making desired products in order and on time and to defined quality in a safe, secure and environmentally acceptable way,” Dimitratos said. “The plant of the future will be a totally different place. It will be a smart plant.”
The idea of a virtual plant working within the real plant is coming closer to reality, he said.
“Virtualization can help improve the plant where you are not testing on the real plant, but instead are validating and testing before going live,” Dimitratos said.